A union says it's concerned that plans to regionalise public sector pay will seriously affect the north east economy.

The Chancellor George Osborne is expected to confirm the move in Wednesday's budget. Treasury officials are quoted as saying public sector pay is significantly higher in some areas than the private sector equivalent. They argue changes would encourage investment and recruitment by private firms.

Unison is among the unions which disagrees. North east official Clare Williams says the proposals are 'not fair' and would take money out of an already struggling economy.

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A union says the north east would be hit hard by plans to end national pay rates for some public sector workers. George Osborne is expected to announce the change in Wednesday's budget. The move would end national deals.

Instead, local factors such as the cost of living would be taken into account. Treasury officials say it's needed because public sector wages are much higher in some areas than their private sector equivalents and this is discouraging investment.